Schneiderman vs. market-clearing prices

Some politicians just want there to be random shortages [WSJ editorial]:

New York Attorney General Eric Schneiderman has subpoenaed the Craigslist website for the identities of people who advertised gas for sale at high prices. Mr. Schneiderman is doing this in the name of a New York law that forbids charging an “unconscionably excessive price” during an “abnormal disruption in the market.”

I’d question the “abnormal disruption in the market.” Wasn’t everything so hunky-dory in New York City, that they were going to hold a marathon? And didn’t they have a professional football game right there in New Jersey?

They’d have all the gas they needed tomorrow if they: Allowed the price of gas to reflect the cost of trucking gas in from possibly hundreds of miles away by tanker truck. Allowed the price of gas to reflect the cost of running and manning generators for the power necesssary to run all the pumps. Waived environmental rules on the “blend” of gasoline that could be sold.

So instead of helping the citizens get back on their feet, let’s call in the lawyers. Sounds like typical NYC to me.

There does seem to be some circular logic at work here. As you point out the Market would solve the problem quickly if allowed to do its job. But the law, as interpreted, expressly prohibits that. So you end up with the situation where when the Market works, the results are interpreted as evidence that the Market was disrupted, triggering penalties that prevent the Market from working.